On January 1, 2021, TAAD Corp purchased TARRA INC with a face value of US$290,000. Bonds....

 

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On January 1, 2021, TAAD Corp purchased TARRA INC with a face value of US$290,000. Bonds. The stipulated interest rate on TARRA INC bonds is 6%. Interest is paid semiannually on June 30 and December 31, and the bonds mature in 10 years. For bonds with similar risks and maturities, the yield on a specific date is as follows. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1, and PVAD of $1) use the appropriate factors from the tables of each factor) January 1, 2021 June 30, 2021, December 31, 2021 7.0.0% 8.00% 9.0% 1) Calculate the Price TARRA Corp would have paid for the TERRA INC Bonds on January 1, 2021(ignore brokerage fees) and Make a journal entry to record the purchase 2) Make all appropriate Journal entries related to the bond investment during 2021, Assuming TAAD accounts for the bonds as a held-to-Maturity investment. TAAD calculates interest revenue at the effective rate as of the date it purchased the bonds 3) Make appropriate journal entries related to the bond investment during 2021, assuming that TAAD chose the fair value option when the bonds were purchased and that TAAD determines the Bond semiannually's fair value. TAAD calculates interest revenue at the effective interest rate as of the date it purchased the bonds On January 1, 2021, TAAD Corp purchased TARRA INC with a face value of US$290,000. Bonds. The stipulated interest rate on TARRA INC bonds is 6%. Interest is paid semiannually on June 30 and December 31, and the bonds mature in 10 years. For bonds with similar risks and maturities, the yield on a specific date is as follows. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1, and PVAD of $1) use the appropriate factors from the tables of each factor) January 1, 2021 June 30, 2021, December 31, 2021 7.0.0% 8.00% 9.0% 1) Calculate the Price TARRA Corp would have paid for the TERRA INC Bonds on January 1, 2021(ignore brokerage fees) and Make a journal entry to record the purchase 2) Make all appropriate Journal entries related to the bond investment during 2021, Assuming TAAD accounts for the bonds as a held-to-Maturity investment. TAAD calculates interest revenue at the effective rate as of the date it purchased the bonds 3) Make appropriate journal entries related to the bond investment during 2021, assuming that TAAD chose the fair value option when the bonds were purchased and that TAAD determines the Bond semiannually's fair value. TAAD calculates interest revenue at the effective interest rate as of the date it purchased the bonds

Answer rating: 100% (QA)

SOLUTION 1 To calculate the price TAAD Corp would have paid for the TARRA INC Bonds on January 1 2021 we need to calculate the present value of the bonds future cash flows using the yield on that date ... View the full answer